Adam Comora: Yes. In order for something to move from advanced development pipeline into construction, you really need a gas pipeline interconnect agreement to place the gas, you need your completed RNG gas rights agreement, which could include partnership documentation, and then we need the final design of the facility and an EPC contract that goes with it — orderly long lead time of — longer lead time equipment. And we have got all sorts of flavors of those, as we are trying to get them across the finish line here where when we maybe have the gas rights agreement, we have got a design of facility and waiting for the interconnect agreement. And in another project, we have got the EPC, we have got our partnership docs lined up and maybe there is an amendment that needs to go through a municipality where you are trying to get on the schedule for a meeting.
So they all have their little flavors to it, but really feel good about a number of these opportunities moving forward.
Operator: One moment for our next question. Our next question comes from Craig Shere with Tuohy Brothers. Your line is open.
Craig Shere: Good morning. Thanks for squeezing me in. And congratulations on the progress with the construction and development portfolio. I will just keep it simple since we are at the bottom of the hour. Just want to dig in a little more to Ryan and Adam’s questions around project delays and first project, RINs timing. It seems that peers have been talking about more systemic delays of quarters up to 18 months versus the outlook a year ago, as the industry sees a variety of issues from site permitting, RNG certification that you talked about, supply chain, pipeline connection issues, many of which are all being impacted by broader labor concerns. But you are kind of describing like some small, limited variability in project timing at this point, which is good. But I am trying to understand why perhaps you remain so confident about the execution of the future project portfolio growth timeline versus what many in the industry are talking about.
Jonathan Maurer: Sure. This is Jon. I will start on that. So essentially, the principal thing that we do when we enter into construction is we start with an EPC contract, as Adam was saying a minute ago. While we don’t have all of our permits at the time that we enter into that contract, we have a general understanding of what that permit process is and likewise, on the pipeline, we generally make sure that we have pipeline options open to us, while maybe not a 100% committed at the time that we start construction that we have clear cut pipeline options. So the timeframe that we’re seeing is really an 18-month or so timeframe from when we pull the trigger to start construction. And remember, when we say start construction, that’s putting in long lead orders, that’s doing engineering work to finalize engineering for other components.
And the actual site construction isn’t really scheduled to start for 6 or 8 months into a construction project. So, if we really contemplate that permits can be acquired during that timeframe, we did see, for example, at the Emerald project that our air permit took a little bit longer and the electric interconnection took a little bit longer, so that a June project ended up being a September project. But the project came right in on budget, in terms of what we were expecting and what we actually achieved. We look to the pulp project as another example of timeframe. We put that into construction in June of this year. And we’re seeing that that project is on track for Q4, we think kind of earlier in Q4. But, so that would keep to that 18-month timeframe that we’re talking about here.
And that includes the procurement of all of our major components, the civil contracting, the electric contracting work and the commissioning. So, when we bring a project on line, that commissioning then usually starts a couple months or so before the project starts to deliver gas into the pipeline. And then, as we kind of mentioned on Adam’s question earlier that once that project delivers gas into the pipeline, we’re able to grab a gas sample and start the RIN certification process to start selling some of the stored gas that’s produced during the ramp-up period. Ramp-up period can be as long as 3, 4 or 5-month period. But, as we do more projects and our team gets better at it, that ram-up period can be shortened. As we can see, we’re two months into the Emerald project and substantially through that ramp-up period now.
So, we’re kind of pleased with how it’s going. We understand what other people are experiencing in the industry. We’ve had other people tell us of the difficulties that they’re having. But we think that perhaps because of the expertise of our team and the experience of our team that we’re able to keep those timelines fairly well defined. Adam, is there anything you want to add?
Adam Comora: I was just going to add that it’s one of the differentiators we feel like we have here at OPAL Fuels is being able to execute — and listen, there could be months or two here or there. But we feel confident and good about the timelines we set out for the things that are in construction.
Craig Shere: If I could just clarify in my mind your answer, and it’s very helpful what was shared. It sounds like you have a high bar to setting a project in construction and signing an EPC contract and the initial orders for long lead time items because it sounds like you’re saying, look, we don’t have the permits in hand and the pipeline connection and such, but we’ve already teed up this process. We’re not starting from square one. We won’t, quote unquote, FID and announce it and sign an EPC unless these other things are kind of the ducks in a row, not complete. So maybe you have a higher standard than some industry protocol.
